The last thing anyone wants to think about when they get out of college is repaying their student loans. But now a San Francisco-based lending start-up is making the thought a little less scary. Social Finance (SoFi) was started by a team of big bank executives who believed there has to be a better way to lend money to well-educated folks with good earnings potential.

The company, founded in 2011, is a nonbank alternative that is now the largest provider of student-loan refinancing, with more than $2 billion in loans funded. It also offers mortgages, personal loans and MBA loans. There are no application or origination fees for its student-loan refinancing, no prepayment penalties, and rates start as low as 3.5 percent—well under the average 4.6 percent interest rate of government-issued student loans.

The company claims its underwriting approach, proprietary technology and word-of-mouth referral rate (currently 30 percent of its volume) is what sets it apart from banks and other lending institutions. A wide variety of venture funds are backing SoFi, including Third Point Ventures, Renren and Baseline Ventures. The company has raised nearly $800 million since it was started, and CEO Mike Cagney has publicly stated he envisions an IPO in the next year.

Source: SoFi

Mike Cagney, co-founder and CEO of SoFi

"As a reformed banker, I knew there was a better way for financial services to work. Fortunately, I met some great co-founders while at Stanford's GSB who shared the same vision and passion."-Mike Cagney, co-founder and CEO, SoFi